MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A T-bill quote sheet has 90-day T-bill quotes with a 5.17 ask and a 5.11 bid. If the bill 1) has a $10,000 face value, an investor could sell this bill for ________. A) $9870.75 B) $9872.25 C) $10,000 D) $9874.00 2) A benchmark index has three stocks priced at $26, $49, and $59. The number of 2) outstanding shares for each is 365,000 shares, 435,000 shares, and 583,000 shares, respectively. If the market value weighted index was 1000 yesterday and the prices changed to $26, $47, and $61 today, what is the new index value? A) 1000 B) 995 C) 991 D) 1005 3) An investor buys a T-bill at a bank discount quote of 4.50 with 120 days to maturity for 3) 9850.00. The bill has a face value of $10,000. The investor's bond equivalent yield on this investment is ________. A) 4.63% B) 5.01% C) 4.57% D) 4.51%

Respuesta :

Answer:

1) B

2) A

3) D

Explanation:

1) Discount yield(%) = Face value - Purchase value/Face value X 360/Maturity ( in days) X 100%

Discount yield (quote) = 5.11; Face value = $10,000; Let Purchase value =  x; Maturity = 90 days

(5.11)% = $(10,000 - x)/$10,000 X 360/90 X 100%

5.11 = 400(10,000 - x)/10,000

x = 4,000,000 - 51100/400 = 3,948,900 = $9,872.25

3) Face value = $10,000; Purchase value = $9,850; Maturity = 120 days

Investor's bond equivalent yield(%) = $(10,000 - 9,850)10,000 X 360/120 X 100%

= 45/10 = 4.5%